Learn about how to use basic trend analysis to make forecasts using an example.
- [Instructor] Now that we've looked…at some different methods of forecasting,…let's take a look at the data example.…Recall our friend, Ed, the economist.…Ed worked for a real estate firm…and Ed has been asked by his boss…to look at property valuations for a commercial building…that the company is thinking of buying.…In particular, Ed is interested…in looking at valuation trends…in the area of this new building…and he's especially interested…in whether past prices predict future prices.…
Ed's gathered some data to help do that analysis.…I'm in the 02_01_Begin file…from the 02_01 folder…under the Exercise Files folder.…Now as we can see, Ed has gathered…a tremendous amount of data here.…He's actually got data…starting all the way back in January of 1871…and he's got monthly data on interest rates,…in particular, the 10-year interest rate,…profit margins for real estate buildings in the area,…property valuations for real estate buildings in the area…in thousands of dollars,…and a moving average for those valuations,…
Professor Michael McDonald demonstrates how to harness the wealth of information available on the Internet to forecast statistics such as industry growth, GDP, and unemployment rates, as well as factors that directly affect your business, like property prices and future interest rate hikes. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. He also covers time series exponential smoothing, fixed effects regression, and difference estimators. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
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- Identify a good source of free data.
- Name the term for the estimate of the impact of an X variable on a Y variable.
- Tell which statistic offers a bounds on the estimate of the impact of an X variable on a Y variable.
- Assess the type of variable that can be used to capture fixed effects.
- Cite the method by which a forecast can be done with a regression.